Wage dispersion

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Wage dispersion is an economic term which refers to the amount of variation in wages encountered in an economy.

[edit] Wage dispersion in the US and Europe

European countries have in general much less wage dispersion than the U.S. does. This is due to the fact the US are dealing with competition from abroad in a different way; instead of having unemployment like Europe does, they allowed the wages of lower-skilled workers to fall relative to those of highly skilled ones (thus keeping some of the jobs that might have been outsourced).^{[citation needed]} Europe, however, maintained a somewhat higher level of wages, at the cost of unemployment (higher base wages, not to mention rigid labour market regulations, such as the restrictions on laying off workers, and powerful trade unions, make hiring an employee a long-term investment in Europe - Not so in the US).^{[citation needed]}